News from Vermont

HOA CONSTITUTIONAL GOVERNMENT: CAI finally admits to being a business 501(c)6 trade organization

By George K. Staropoli

January 15, 2017

CAI finally admits to being a business trade tax-exempt organization.

Community Associations Institute (CAI) is a national nonprofit 501(c)(6) organization founded in 1973 to foster competent, responsive community associations through research, training and education. […] We work to identify and meet the evolving needs of the professionals and volunteers who serve associations, by being a trusted forum for the collaborative exchange of knowledge and information, and by helping our members learn, achieve and excel.[1]

In my 17 years as a HOA reform activist this is a landmark first! This is a personal achievement. There was very little support from other reform advocates and homeowners regarding misrepresentation by CAI.[2] As a result of my repeated criticisms and exposes, CAI had to apparently fess up.

Over its 44 years in existence CAI has mislead its viewers, members, the public and legislators as to its legal tax-exempt status. It news releases, websites, Common Ground magazine, communications with state and federal elected officials, and court filings that refer to representing homeowners and HOAs.[3] CAI is not allowed to have HOAs as members![4] Example, CAI’s current web page reads,

CAI provides information, education and resources to the homeowner volunteers who govern communities and the professionals who support them. CAI members include association board members and other homeowner leaders, community managers, association management firms and other professionals who provide products and services to associations.

McClatchyDC: HOAs from hell: more horror stories, more fraud – and prospect of legislative action

By Judy L. Thomas

December 23, 2016

In Georgia, a decorated Army veteran who lost a leg in Afghanistan is now ensnared in a battle on the home front — with his homeowners association.

The HOA filed a lien on his house related to the placement of his trash cans.

From Maryland to California, prosecutors have charged HOA officers and property management officials in fraud and embezzlement cases with losses that total in the millions.

And in Missouri, lawmakers are working on a proposal to make homes associations more accountable, with one saying homeowners in his district have become so incensed with their HOAs that “we are one step away from pitchforks and torches.”

Lawmakers in some states are saying enough is enough. It’s time, they insist, to take on a more aggressive role in regulating the $85 billion industry.

“It’s the number one constituent issue in my district,” said Missouri state Rep. Bryan Spencer, a Republican from Wentzville, near St. Louis. “This is basic property owner rights. It’s a fundamental right that we should have as Americans.” Read more:

The Washington Post: Condominiums in Crisis: Financial troubles put many communities at risk

By Bill Turque

September 18, 2016

For five summers, a tarp has covered the swimming pool at Grand Bel II, a condominium community in Silver Spring that has no money for lifeguards, chemicals or insurance. The Vistas at Washingtonian Woods in Gaithersburg faces $600,000 in repairs but has just $400,000 in cash reserves.

At Saxony Square in Alexandria, an unemployed man nine months behind on his mortgage negotiates with lenders to keep his two-bedroom condo. His neighbors struggle to pay their monthly fees; since 2010, Saxony’s board of directors has filed more than 80 court actions to try to collect such assessments.

Even as posh condos rise in trendy neighborhoods around the nation’s capital, manyolder complexes are mired in a recession that never ended. A cycle of aging infrastructure, limited resources and foreclosure is putting these communities in a deep financial hole, threatening what traditionally has been an affordable path to homeownership for the working class. Read more:

But the suburbs of Atlanta no longer hold just the promise of good schools, clean streets, and whitewashed homes with manicured lawns proudly displaying American flags. They are increasingly home to the very poor, who find themselves stranded in suburbs without the kind of transit or assistance that they might once have found in cities’ urban cores.

The Brookings Instituteestimates that since 2000, two-thirds of poverty increases have occurred in the suburbs and 56 percent of people in poverty now reside in a suburb. In places like Atlanta, that number grew by over 150 percent. In addition, most suburbs are ill-equipped to deal with these increases.

Poverty in the inner-city isn’t something we should strive for, but if you’re going to be poor anywhere, that might be a good place to do it. Advantages of urban life for the poor include access to transit, social services, and jobs. Poverty in most suburbs lacks all of these advantages.

We have no plans to deal with this. In fact, it isn’t even on our cultural radar. And it is likely that the far-reaches of suburbia are actually making people poor who might have otherwise have been middle class. We have no plan to deal with increasing suburban poverty and the dominate governing bodies of suburbia in many places – Homeowners Associations – are ill-prepared. Read more:

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